Things to know about the proposed Rural 5G Fund (Part 1)
What is the Rural 5G Fund?
The Federal Communications Commission doesn’t want rural areas to have to wait for 5G. To that end, in April, Chairman Ajit Pai put forward a proposal for a $9 billion Rural 5G Fund that aims to “help ensure that rural Americans enjoy the same benefits from our increasingly digital economy as their urban counterparts—more than 200 million of whom already have access to major providers’ 5G networks—and would include a special focus on deployments that support precision agriculture,” as the program was described by the FCC.
The Rural 5G Fund would repurpose money from the Mobility Fund II program, which fell apart over after a lengthy challenge process which resulted in the commission finding that the coverage maps it was working with, based on data they requested from major mobile network operators, were overstated — in some cases, significantly.
So what exactly is the Rural 5G Fund, how does it work, and what do industry players think of it? Here are some of the most important things to know about the Rural 5F Fund and how the plan is being received by the telecom industry.
A three-phase fund. The commission’s proposal lays out a plan with a pre-auction phase and two auctions. First, the FCC would create a 5G Small Carrier Fund, which the FCC described as a “pre-auction alternative mechanism” that would offer up to $2 billion over a 10-year period to current legacy support recipients which have 500,000 or fewer subscribers. That fund would allow small-sized carriers to continue receiving USF funds to support their existing networks in small-to-mid-sized Rural-Urban Commuting Areas (RUCAs) in return for deploying 5G, according to benchmarks TBD.
Then, there would be two auctions. The first auction would be a $5 billion reverse auction, tentatively scheduled for 2021, for the small-to-midsized RUCAs not being served through the 5G Small Carrier Fund. The second, proposed for 2024, would disperse the remaining $2 billion in “eligible markets” as determined by which areas are being served as a result of the first two phases, plus taking into account coverage data from the FCC’s Digital Opportunity Data Collection program and “T-Mobile’s merger specific rural 5G build out commitments.”
The proposed budget for the Rural 5G Fund includes $680 million reserved to support 5G networks serving tribal lands and $1 billion earmarked to support precision agriculture-related projects and deployments.
Data continues to be an issue. “The Commission continues to lack reliable data about where there is and is not 4G LTE coverage in this country,” the Competitive Carriers Association said in a filing on the 5G Rural Fund. CCA argues that in the recently passed Broadband DATA Act, Congress instructed the FCC to create new broadband maps and use those when making “any new award of funding with respect to the deployment of broadband internet access service intended for use by residential and mobile customers.” That would include the Rural 5G Fund.
The FCC has offered up two options for proceeding in its notice of proposed rulemaking: The first option would hold an auction in 2021 by defining eligible areas based on current data sources that identify areas as “particularly rural and thus in the greatest need of universal service support” and it would “prioritize funding to areas that have historically lacked 4G LTE or even 3G service.” The second option would put a new mobile broadband data collection effort first, but would delay the first auction until at least 2023.
Both of those options have met with resistance from various quarters. On one hand, there is opposition to any delay in funding for improving rural mobile coverage, but there is also opposition to proceeding without better data on which to base funding disbursements.
T-Mobile US has some reservations about its deployment plans being used as the basis for Rural 5G funding awards. The New T-Mobile committed, as a condition of the FCC’s approval of its merger, to cover 90% of the U.S. rural population with 5G within six years, or face fines from the FCC. The FCC’s proposed 5G Rural Fund, T-Mobile US said in a filing, “focuses heavily on defining … unserved areas as those areas outside of here T-Mobile will deploy its 5G network to meet its merger conditions.”
The carrier continued: T-Mobile’s commitments … are population based and do not commit T-Mobile to deploy 5G to defined geographies” and the merger order “gives T-Mobile flexibility to identify where to deploy 5G, consistent with its overall population-based benchmarks. … Simply put, the exact census tracts and precise contours of T-Mobile’s network six years from now are not fixed, and thus, it is not practicable to be the basis for the 5G Fund.” Also, T-Mo added, “advance disclosure of one company’s plans would give competitors a long lead time to plan and react to the disclosed strategy while limiting the company’s ability to react to them.”
“T-Mobile recommends that the Commission look at more objective measures and take a more holistic look at industry 5G deployment,” the carrier said. It suggested using Form 477 data or the DODC aggregated from all providers, “publicly available metrics of rurality … and other methods” to “fund deployment in areas with the lowest population density. These are the areas least likely to coincide with privately funded deployments by T-Mobile or other carriers and are most in need of subsidies.”
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